Podcast 58: Brew Johnson of PeerStreet

PeerStreet has taken a unique approach to the real estate lending market, one they believe is more aligned with investor needs.

Real estate is probably the hottest asset class in the online lending space with dozens of platforms having launched in the past couple of years. One of the more interesting platforms is PeerStreet which was started by a former real estate attorney and a tech entrepreneur.

In the latest episode of the Lend Academy podcast I interview Brew Johnson, the CEO and co-founder of PeerStreet. He has a long history in real estate and is one of the few people who saw the financial crisis coming in the mid-2000’s. His experience there ended up leading to the founding of PeerStreet in 2013.

In this podcast you will learn:

How the financial crisis led to Brew’s interest in starting PeerStreet.

The area of the real estate market where PeerStreet focuses.

How they source deals by partnering with originators.

Why originators choose to work with a platform like PeerStreet.

Why they like their originators to have skin in the game by holding some of each loan.

The typical loan terms for PeerStreet loans.

Why their website is investor-centric.

An explanation of their revenue model.

The status of the PeerStreet loan book.

Why Brew believes it is better for investors for PeerStreet to source loans through originators.

Peter Renton: Today on the show, I am delighted to welcome Brew Johnson. He is the CEO and Co-Founder of PerStreet. Now PeerStreet are a real estate platform, they’ve been around for a couple of years, I found them personally very interesting. They’re doing things a little bit different to some of their competitors and we dig into that in this interview. Particularly, one of their unique differences is how they source deals, they’ve taken an approach that I haven’t seen duplicated anywhere and so we get into that in quite some detail. We talk about the investor side of the business, their tech side where they are also very strong and we get a bit of an idea of what’s coming down the track for PeerStreet. Hope you enjoy the show!

Welcome to the podcast, Brew.

Brew Johnson: Thank you, thanks for having me.

Peter: Okay, so let’s just kick it off with a bit of background about yourself and how your sort of career arch has gone and how you came to start PeerStreet.

Brew: Yeah, the company is kind of tied pretty closely to my personal career so…background-wise, I started my career as a real estate attorney. I was in law school…I went to law school in 1999 to 2001 and when I was in law school I was planning on doing tech work and I had helped my brother found a tech business while I was in law school. You know, everything was tech and I was planning on, thought I’d get out and be a lawyer, do IPOs and things like that and maybe then go in-house at a tech company, but when I got out of law school the dot com bubble had burst and the law firm I went to basically just threw me in the real estate department because all the tech work had dried up.

It was one of these really interesting kind of serendipitous things, getting into real estate in 2001 everything was on the upswing in real estate so it was a very, very kind of lucky happenstance what happened to me. I practiced real estate law till 2001 to late 2005, early 2006 and that was obviously the run-up in the housing bubble and real estate kind of boom that was happening. The firm I worked at, I represented all sorts of national home builders, banks, developers and there was a lot of things happening in the marketplace that just didn’t make sense to me and I kind of became obsessed with what was driving this housing boom and the real estate boom and it led me to the securitization market.

A lot of things were happening behind the scenes, 2004/2005 it just seemed like everything was based on kind of smoke and mirrors to me. I ended up leaving real estate and real estate law planning on waiting for things to fall apart and maybe doing some sort of vulture fund, do something like that, so I had shorted Fannie Mae and all the banks and I was going to wait for things to…I was waiting for the financial crisis to unfold.

Luckily, while I was going to wait for that, my brother’s tech business that I helped him found was growing very quickly and he needed help so I ended up getting back into the tech world and working for him and his company. This was early 2006, we basically decided that it was a good time to sell the company shortly thereafter mainly because I was convinced that the financial crisis was coming.

Peter: Right.

Brew: So we ended up selling that company to Expedia in July of 2008. Personally, being in this kind of weird place of really having a very good understanding of real estate law, the kind of real estate finance markets and then spending a couple of years in the tech world, at that time seeing what Lending Club and Prosper were doing in peer to peer lending, I thought…it was early 2008, I thought, wow, when the banks go out of business or the banking system is very kind of changed with the financial crisis that I saw coming, if we could do something very similar to that in real estate it could be a very, very valuable business, very important business to people so I actually worked up a very similar business plan to this back in 2008/2009, but for a variety of reasons the timing wasn’t right.

So fast forward to 2013, it just seemed like everything had set up perfectly in the marketplace to focus on this business. The tech had come a long way, Lending Club had hit its kind of tipping point, critical mass was happening worldwide and marketplace lending and crowdfunding was….it was just clear the opportunity was ripe.

Peter: Right, so then you had some co-founders, I believe. Can you tell us a little bit about how the company actually came into fruition?

Brew: Yeah, so 2013, this was when I decided to focus full-time on the business and kind of put aside a lot of my real estate, a lot of other stuff I was doing. I reached out to my Co-Founder, Brett Crosby. It was in early 2014 when I first reached out to Brett. Brett’s an old friend of mine, he had originally founded a company called Urchin Software, a corporation which was acquired by Google in 2005, and he turned that into Google Analytics, you know, the largest web analytics platform in the world. He spent a decade at Google just doing a variety of different things. I’ve always just respected Brett, we’re old, old friends, went to college together and he was just a guy as soon as I decided to go focus on this business full-time, he was clearly the right choice to be my co-founder.

Peter: Right, right, okay.

Brew: It was an interesting thing though, he had this long and kind of very successful career at Google and he was very happy there. Originally, I went and kind of pitched him on the idea and convinced him to invest in the business as an angel investor. After him getting involved more as an advisor it became clear that it was the right opportunity for him to leave Google to come on board so that’s pretty much what happened.

Peter: It’s a nice combo you have there with the real estate background and the tech, that certainly helps a lot. So let’s just dig in a little bit about PeerStreet. What part of the market are you focused on, are you doing fix and flips primarily, where are you focused?

Brew: The main focus is on single family properties so fix and flip and short term buy to rent loans. We’re going up to about 36 months terms, but focused on those single family properties. We‘ve always, me personally….when underwritten correctly it’s just a fantastic asset class and it has very mispriced risk and great risk adjusted returns for investors so it’s always been our focus. Now as the business grows, the goal is to provide as much diversity for investors as possible, but we feel that the short term rehab loan, fix and flip loan and the short term buy to rent loan in the current market is the right place to surface up loans for investors.

Peter: Right, right, okay, looking at your website you seem to have a slightly different approach to many other people in the industry. You talk about investing alongside originators, can you explain how that process works?

Brew: Yeah, yeah, I mean from an investor’s point of view or from an investor coming to the site and investing, things work very similar to Lending Club or Prosper. You sign on, you create an account, you fund your account through PeerStreet’s website, but when you fund it your funds are held at City National Bank and if you want to invest in a loan or 500 loans, it’s like clicking a button and selecting a stock so kind of functionally how it works from investing, it’s like E-Trade for investing in real estate debt similar to Lending Club and Prosper.

Now the idea of why we structured things on the other side of the marketplace where we kind of work with these originators or allow investors to invest with these originators, it feeds into our credit and underwriting model. The space that we’re dealing in, in this rehab or fix and flip lending space, I mean, historically, high quality lenders in this space in real estate have been local real estate experts that have a focus on a geographic area of expertise where they make loans in which gives them great borrower relationships. They understand the market that they’re competing in and there’s a lot of lenders that have been operating in this space for many, many years, but generally the market is extremely fragmented with local players scattered around the country.

When we look at the marketplace we thought as opposed to going out and finding borrowers and originating loans ourselves, it makes much more sense both from a risk perspective for investors as well as just for a business, from PeerStreet’s point of view to work with these existing lenders as opposed to going out and trying to compete with them.

The reason we think it’s smarter is that it allows us to create diversification for investors a lot easier and by working with experts who know their markets and have been operating in lending for a long time, it finds us a higher quality of loans out of the gates coming into PeerStreet’s platform.

Peter: Okay, so let’s just…I just want to dig into that a little bit more. You talk about having…investing alongside these originators…just talk me through a typical deal so we can really unpack how it all works.

Brew: Yeah, a typical deal of borrower…one of our originators is out there, he’s in the business of making loans to fix and flip operators so somebody is buying a house, they need a loan for it, they go to one of our origination partners, our origination partner underwrites that loan and makes a loan to the borrower with their own capital. Then that originator will bring the loan to PeerStreet for inclusion on the marketplace. PeerStreet, we re-underwrite the loan as if we were making the loan ourselves. It’s a combination of big data analytics, manual underwriting, we send somebody out to the property to put an appraisal on it and if it meets our underwriting guidelines then we make it available for investment on PeerStreet.

We say that you’re investing alongside the originator of the loan, it’s very important for us that the first person who made that loan committed their own capital to make that loan. When we bring the loan out on PeerStreet’s platform, we require the lender to have skin in the game, meaning that the interests are aligned alongside the investors on the platform.

Peter: Right, how does it typically work? Are you trying to get like 25% skin in the game, 50, what do you open up? How much of a loan do you open up to your investors and how much do you want the lender itself to hold?

Brew: Yeah, I mean, it varies depending on who the lender is and our track record with the lender and how comfortable we are with the lender as well as the profile of the particular loan. So all of the lenders have skin in the game in the fact that if they make a loan there’s no obligation for PeerStreet to take the loan and put it on its marketplace. We have the option to take loans these originators make so they have skin in the game in every case in the fact that if they make the loan and we don’t take it they’re going to be holding that loan themselves. Depending on the risk profile of a particular loan, generally, it’s about 10% of the loan is what we have as skin in the game where the originator has 10% kind of money at risk, but it varies. Sometimes it could be 0% if it is a very, very safe secure loan, sometimes it could be higher than that.

Peter: Right, right. Okay, so the investors on your platform are not necessarily…they’re not really loaning money to the developer who is doing it, they’re loaning money to the person who has loaned the money to the developer.

Brew: That’s right and really what happens….PeerStreet acquires the loan, I mean, similar to how…I guess one way to look at it from kind of an expert’s point of view like you and you understand the process probably better than anybody. Similar to how Lending Club and Prosper use WebBank as a third party to actually make the loan. We look at these local lenders, these originators as our kind of WebBank. When the loan is made, PeerStreet makes it available for investment, PeerStreet then acquires the loan and PeerStreet holds that loan in a bankruptcy remote special purpose entity and when investors invest in a fractional interest of that loan, they get issued a mortgage dependent note, similar of a borrower dependent note on Lending Club and Prosper.

Peter: Right.

Brew: But the loan itself, because the loan itself that PeerStreet puts into this securitization, this bankruptcy remote entity is secured by real estate, we look at it as a lower risk proposition than consumer credit.

Peter: Sure, that makes perfect sense. So then what typical loan terms are we looking at here? Are these six to twelve months, what are the interest rates range?

Brew: Yeah, the interest rates range, depending on the loan from 6% to 12% is kind of where we’ve operated. If you look across the portfolio of loans we’ve done, the net interest rate to investors is just under 8%, 7.9%, that’s across the portfolio, average nine month term and average 62% loan to value which is the main risk characteristic in a real estate loan. So the way we look at it…I think if you look at Lending Club or Prosper’s kind of platform wide interest rates, very, very similar interest rate, but because of the security of the asset, we think that the risk profile is more akin to kind of A graded notes or the very highest rated notes on Lending Club and Prosper because of that security with the real estate aspect to it.

Peter: So, curious about the originators, if they send you a loan and you don’t put it on your platform, what are their options? I mean, obviously before you guys came along I presume these people had relationships where they were able to fund their loans, what are their options outside of your platform?

Brew: Yeah, so there’s kind of different segments of these non-bank lenders that deal in real estate. Some of these lenders just lend the money and hold the loans to maturity, historically, and there is no kind of consistent market for them to build and sell loans into, kind of consistently to create liquidity for their business. So, typically they would make a loan and hold on to that loan until the loan matured and then when the loan paid off they could take their money and go make a new loan.

Typically, they may have investors that they gather together to lend money out of a fund or they might make loans and kind of put investors into a loan one at a time so there’s a few different channels for how these lenders have capital to make loans, but the key point for most of these lenders is that it’s a very capital intensive business because they’re not a bank, they don’t have deposits that they can lever to make loans off of.

So it’s very capital intensive for them and generally, their cost of capital is very, very high so by participating with PeerStreet it really creates benefits for their business in that it allows them to kind of take money, be able to take investors in loans then make loans to other borrowers. It kind of creates liquidity for their business and allows them to potentially expand their business if they are high quality or want to and for our investors on the flipside, it gives us a higher quality of deal flow. We’re dealing with lenders that have track records and experience and expertise and also, this allows investors to diversify a lot easier across, not just loan type, but also lenders because the quality of lenders is a real risk mitigant so if you can diversify across lenders, it provides risk mitigation.

Peter: Sure, sure, it makes sense. Your website is very investor-centric so you’re not set up to take borrowers on your website. You’re only going to take a borrower who you’ve vetted and you’ve had a relationship with that is…it’s a hard money lender, I guess, so someone who’s a small time developer looking to fund their fix and flip, they’re not going to come to you, they’re going to come to one of your originators, right?

Brew: That’s right, that’s right, that’s the way it typically works. Now I mean, borrowers do come to us, they can see the lenders that participate in our platform, they can go contact those lenders directly so borrowers that come to our platform, they can find lenders that make these type of loans in their area, but our main focus is not going out directly to borrowers.

Peter: So what’s your revenue model then? Are you taking an origination fee on the loan itself, where are you making money?

Brew: Similar to Lending Club and Prosper, I mean there is a servicing spread that’s charged to the investor, the 1% and we participate with the lenders on kind of the fees that are charged to borrowers.

Peter: Right, right, okay. So can you just give us some idea of your loan book, I mean, you go to your website and you see all the loans that have been fully paid off. Have you had 100% track record as far as loans being paid off, where are you at?

Brew: Yeah, we’ve had no losses or defaults to-date, we haven’t had any payments that have been past 30 days delinquent. Part of that, it’s two-fold the reasons for that; one is because we kind of cast a very wide net. We have many, many lenders that bring us loans. We can be very selective in the loans that we bring through on the platform because we kind of have a wider funnel effectively so we can kind of deal from like a higher quality place out of the gates.

We actually looked at this as almost like…you’re looking at creating kind of a tech platform which Brett and I both kind of…the goal was to do that. Our whole thing was it was very important to be able to create value to the participants in the ecosystem. We looked at it more investor-centric like…how do we provide them as much safety as possible to the investors to help us establish our credibility as a platform. From day one we looked at it almost like a conflict of interest if we were to go out and find the borrowers directly and make loans to borrowers directly because to create scale in this particular asset class, we almost looked at it as like…the only way to kind of create a massive amount of scale in this would be to do as many originations as possible and we looked at it as almost a conflict.

Our interest would not be realigned with the investors necessarily if we were to go out and find borrowers…we thought there was a risk of potentially having to drop our underwriting standards basically to be able to create that scale to create a very valuable tech business and justify the massive valuations that you see.

Peter: Right.

Brew: So it was very important for us from that point of view and then just functionally, I mean as a business, we have a higher amount of deal flow…it’s just better for investors to create that diversification aspect to it. There’s a variety of reasons why we structured things in that way, but it all comes down to trying to minimize risk for investors and kind of create that platform.

Peter: Right, can you tell us a little bit about that platform, I’m curious. I mean, you’ve got one of your co-founders who basically founded Google Analytics. I actually was a client of Urchin from 2003 onwards until it became Google Analytics. I know Urchin very well, it was a great…I loved it and it seems like it keeps getting better.

Brew: Yeah, you know, it’s funny, just kind of side note…obviously, it’s such a ubiquitous kind of thing. I can’t tell you how many times. Brett always gets very happy when he talks to someone that used Urchin back in the old days before the Google days…obviously, it’s fond memories for him, is kind of creating and building that business, but, yeah it’s pretty amazing how many stories you hear like that. When I get off, I’m going to tell him…he’s going to be very excited that you were an Urchin user.

Peter: (laughs) Right, well it’s funny because I explain sometimes….you know, they have that UA code on the Google Analytics when you’re setting it up on your website. That’s an Urchin Analytics, it’s sort of part of the history of Google Analytics.

Brew: Yeah, that’s right. I hate pumping Brett up too much because it might expand his ego too much, but the old war stories but I think in most tags there‘s the UTM tag, so..

Peter: Exactly.

Brew: Brett is the one…at least he claims that he was the one that named it that because back then they were just making up like what is going to be the protocol of this. He always jumps on me, but it used to stand for…it’s not Urchin Tracking Module, but it’s something like that. It was like the original, anyway…

Peter: Anyway, we’ve lost people who aren’t interested in analytics. (laughs)

Brew: (laughs) Sorry.

Peter: Anyway, no problem, no problem. My question is based on your tech platform. I’m curious given the history of your co-founder, I mean, what have you done on the tech side that really makes PeerStreet unique?

Brew: Yeah, I mean, there’s a few things, especially in real estate it is very, very unique, I think. It’s a combination of the tech along with the legal structure of the business. I talked earlier about how we are from an investor point of view it is very similar to Lending Club or Prosper, but a lot of real estate…traditionally, real estate you would invest in a loan or a property and you sign legal documents for that one property, you kind of wire money for that one deal, you get interest payments back for that one particular deal but our whole system as a build is effectively, you know like an E-Trade for investing in these real estate loans. It’s very complex in terms of servicing of the loan payments and the software that has been built under the hood to track all the payments so you as an investor on PeerStreet, when you get interest payments you can re-invest those interest payments into new loans in very small increments without having to withdraw it from your account so interest payments come back…if you have a hundred loans on PeerStreet, or a piece of a hundred loans, interest payments come back in, they get credited to your account, you can re-invest that into a new loan on PeerStreet to create a compounding effect. That’s pretty rare in real estate, I mean normally real estate, like I said, is…everything is segregated so underneath the hood it’s a very, very complex tech structure both in terms of like how loans are processed, how loans are serviced for investors, the accounting software, you know, all of the kind of payment portals between your external bank and City National Bank which is our custodial bank.

There’s a lot of things in there that tech-wise are very, very complex. Then on the data side, on the analytics side, obviously, valuing the loans and underwriting loans and our whole underwriting process of when loans get on and how we qualify them for inclusion on the platform, obviously includes a whole lot of analytics and data and risk analysis on loans when they come in combined with traditional boots on the ground, you know, going out looking at properties and putting a value on it. Tech kind of touches everything from when borrowers come on till when investors are making payments or taking withdrawals or doing whatever they are so its…I think underneath the hood compared to anybody else out there operating on the real estate side online, I think it’s a pretty different animal we’ve built.

Peter: Right, as I said on your website you’re very much focused on investors. Can you give us a sense of who is investing with you today?

Brew: It is all accredited investors, obviously, we’d love to be able to be open up to everybody, but, as you know we’re constrained by who we can allow on. So we started…we’ve been basically operating the platform for the past year. When we started, we were very private, we invited on kind of our own network of investors which were all wealthy individuals and family office type investors. The first 12 months we’ve pretty much operated fully with high net worth individuals and family offices and now it’s running the gamut from those individuals up to $500 million fixed income asset managers that purchase on a whole loan program so there’s a mix.

Peter: Right, I signed up in 2014. We had to wait like six months I think it was before you let us actually onto the platform, but…

Brew: If we were more on top of it then understand that you’re a peer to peer lending celebrity, we should have given you earlier access. (laughs)

Peter: (laughs) No problem, no problem.

Brew: I apologize.

Peter: So can you give us some sense then of the scale you’re at today. I mean, what did you do last year in terms of loan volume?

Brew: Yeah, we don’t talk too publicly about this. What I’ll say is over the last 12 months in that very private kind of beta, we did over $50 million in the last 12-month period on the retail side of things, on the retail platform. Going forward, the demand that we have kind of going forward, both in terms of institutional and retail is, should be in the hundreds of millions this year of originations.

Peter: Right, okay, that’s great. As far as your investors…I was doing a little bit of reading about you guys and I saw The Big Short the other day. It sounds like you’ve got Michael Burry on your investor team who was played by Christian Bale in the movie and I just wanted to get sort of a….how did you find him? I mean, he’s a real estate celebrity obviously, he had the book and now the movie. How did you get him on board?

Brew: Yeah, one of these interesting things. I told you how back in my…not to go too far field again on you, but when I talked about when I was a real estate attorney and shorted all of the banks and stuff and Fannie Mae all that before the crisis. After coming out of the crisis and reading The Big Short, he was just a complete idol of mine, like here is this guy who is…first of all, his whole story is insane that he dropped out of medical school at Stanford, his residency to become this incredible hedge fund manager. He was in Cupertino and figured….he wasn’t on Wall Street, he was in Cupertino and figured out the whole thing and he was the first guy so I just always idolized him.

Literally what went on was, early on when Brett and I were putting down our list of like hey, who would we like on our advisory board, who would be the number one guy? I put him at the top of the list. Turns out that Brett had invested in a business that Michael Burry had also invested in so we got an intro to him through the founder of that business. We went in to pitch him, for me it was like meeting The Beatles, he was like an idol, I was pretty nervous. Anyway, he’s also known just for being extremely smart and he’s like one of these guys when you talk to him…when you’re in the same room with him this guy is on a different level and we were told when we went to meet him…he doesn’t take a lot of time, no small talk, just get right to it and…our first meeting ended up going two hours and I told him how I kind of come to my conclusions about the financial crisis and everything and we just kind of hit it off and we asked him to be an advisor. He said well if I am going to advise then I’d also like to invest and he’s been a great supporter. He’s just one of these guys that…he’s just incredibly, incredibly intelligent.

But in addition we have some other investors that were involved with that book too, but they’ve asked to kind of not be broadcast too much.

Peter: Okay.

Brew: But Michael Burry is like the most well known and he’s just a phenomenally smart guy, we’re just thrilled that he’s been involved and been a supporter of us.

Peter: Right, okay, so before we wrap up I’d like to ask you what the future holds for PeerStreet. Are you going to stick with this residential fix and flip, are you going to broaden your approach? What’s in the cards for the next 12 to 24 months?

Brew: The short term focus is clearly on this short term single family residential asset class, I mean, when the time is right we would like to move into other asset classes. We clearly look at the longer term buy to rent loans, we look at non-qualifying mortgages. Someday in the future, I personally believe that every type of mortgage will be done through a platform like PeerStreet and hopefully, through PeerStreet’s platform because at the end of the day, it’s just a more efficient way to connect investors to a loan, right?

Peter: Right.

Brew: When you’re talking about real estate loans and mortgages it’s one of the largest, most important financial asset classes in the world. I mean, the most liquid, largest…it’s an enormously important asset class so at the end of the day, we look at PeerStreet as being a better way for any investor to invest because it’s simply more transparent and more direct. You think of it that way and you think of like the, you know, the idea of somebody going in and having to spend three months of going through a process of getting a 30-year mortgage on a loan with a bank. It just does not really make sense if there’s investment demand for those type of mortgages.

So in the future, we’d like to do every type of mortgage. Now next 12 to 24 months, we might just be doing single family and fix and flip and buy to rent or rehab loans because it’s just a great, great asset class. We just think that when underwritten correctly in some markets that are healthy, it just provides the best risk adjusted return for investors. So when the time is right, we’ll go into other asset classes, but for right now, everything points to this being the right place to be.

Peter: Okay, so last question, it’s no secret that there’s a lot of real estate platforms out there today and you guys obviously have a bit of a unique approach, but I’m curious, how do you differentiate yourself from all of the competitors out there?

Brew: We know very much how we’re different. The main reasons we’re different is that we don’t originate our own loans which almost sounds counterintuitive, but that’s actually like we think it is a big value prop for our investors, so we don’t originate our own loans. That’s clearly like the biggest differentiator. I think we’re the only ones that do not originate our own loans and that are very proud of that. Now our returns are a little lower because we don’t do that both for our business, but we just think it’s offset by the risk mitigation. So that’s the clear one.

The second one is we’re just a hundred percent focused on first position lien real estate loans so the safest part of the real estate capital stack. I don’t think anybody else is…everybody else is originating their own loans or their own deals. PeerStreet is not originating and then we’re also focused whereas a lot of other players out there might be first position liens, equity investments, preferred equity and do a little more kind of broadly…we’re just very, very focused on the asset class we’re dealing in.

Peter: Okay, on that note I’ll let you go. I very much appreciate your time today, Brew.

Brew: Yeah, great and thanks for having me. I mean, I told you…I didn’t tell you before you started, but when I talked about like in 2008/2009 working off kind of a business model similar to what we’re doing, I’ve been following the space for a long time and I’ve been reading your stuff for so long it’s crazy. I feel like I know you already (laughs), but the thing that I also love about your particular story and like how you’ve done this…it’s just like almost a great modern day like internet kind of thing, something new is out there, you find the information about it, you create this brand and this great kind of business around it, you provide a lot of information and value to people out there. The whole arch of your particular career into marketplace lending has been awesome.

Peter: (laughs) I’m blushing.

Brew: Oh, but it’s grand! I remember reading a report you did on the London LendIt a couple of years ago and kind of going through a bunch of things. I was like, wow, what a service this guy is providing and everything you’ve done, obviously with all this stuff has been great. I’m very, very happy you reached out to me and we could do this.

Peter: Okay, great well on that note thanks a lot Brew, appreciate your time.

Brew: Thank you, Peter, talk to you later.

Peter: Bye.

So one of things I like about this new way of doing real estate is we touched on the financial crisis and we touched on The Big Short and how the run-up in housing was one of the major triggers of the financial crisis. I’m struck by the fact…if we have had a system in place where the vast majority of lending was done or a large part of lending was done by platforms like PeerStreet, like these online platforms, there simply would not have been a financial crisis like this and there wouldn’t have been a need to bail out anybody and that’s where I think the promise of this is. We’re just getting started here, we’re talking about something that’s going to go on for many decades and I’d like to think that eventually, while there will be bank loans done probably for the next hundred years, I’d like to think that a lot of lending is going to be done through these online platforms and that’s going to be a safer way for our economy to operate.

Anyway on that note, I would like to thank you very much for listening. I very much appreciate it and I’ll catch you next time. Bye.

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